Instructions Identify which of the preceding items should be included in invento
ID: 2469659 • Letter: I
Question
Instructions Identify which of the preceding items should be included in inventory. If the item should not be included in inventory, state in what account, if any it should have been recorded. Delmott sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Below is information relating to Delmotts purchases of Xpert snowboards during September. During the same month, 102 Xpert snowboards were sold. Delmott uses a periodic inventory system. Instructions Compute the ending inventory at September 30 and the cost of goods sold using the FIFO, LIFO, and average-cost methods. (For average-cost, round the average unit cost to three decimal places.) Prove the amount allocated to cost of goods sold under each method.Explanation / Answer
FIFO Method
Explanations
Units
Sold
Unsold
Unit Cost
Cost of Good Sold
Cost of Good unsold
A
B
C=A-B
D
E=B*D
F=C*D
Sept. 1
Inventory
12
12
0
$ 100
$ 1,200
Sept. 12
Purchases
45
45
0
$ 103
$ 4,635
Sept. 19
Purchases
50
45
5
$ 104
$ 4,680
$ 520
Sept. 26
Purchases
20
0
20
$ 105
$ -
$ 2,100
127
102
25
$ 10,515
$ 2,620
$ 13,135
As per the above calculation ending inventory is 25 units and their cost is $2,620
And Cost of Good Sold is $10,515
LIFO Method
Explanations
Units
Sold
Unsold
Unit Cost
Cost of Good Sold
Cost of Good unsold
A
B
C=A-B
D
E=B*D
F=C*D
Sept. 1
Inventory
12
0
12
$ 100
$ -
$ 1,200
Sept. 12
Purchases
45
32
13
$ 103
$ 3,296
$ 1,339
Sept. 19
Purchases
50
50
0
$ 104
$ 5,200
Sept. 26
Purchases
20
20
0
$ 105
$ 2,100
127
102
25
$ 10,596
$ 2,539
$ 13,135
As per the above calculation ending inventory is 25 units and their cost is $2,539
And Cost of Good Sold is $10,596
Average Cost Method
Explanations
Units
Unit Cost
Cost
A
B
C=A*B
Sept. 1
Inventory
12
$ 100
$ 1,200
Sept. 12
Purchases
45
$ 103
$ 4,635
Sept. 19
Purchases
50
$ 104
$ 5,200
Sept. 26
Purchases
20
$ 105
$ 2,100
127
$ 13,135
Cost per unit=$13,135/127
Cost per unit=$103.43
Cost of Good sold=102*103.43
Cost of Good sold=$10,549.37
Cost of ending Inventory=25*103.43
Cost of ending Inventory=$2,585.63
FIFO Method
Explanations
Units
Sold
Unsold
Unit Cost
Cost of Good Sold
Cost of Good unsold
A
B
C=A-B
D
E=B*D
F=C*D
Sept. 1
Inventory
12
12
0
$ 100
$ 1,200
Sept. 12
Purchases
45
45
0
$ 103
$ 4,635
Sept. 19
Purchases
50
45
5
$ 104
$ 4,680
$ 520
Sept. 26
Purchases
20
0
20
$ 105
$ -
$ 2,100
127
102
25
$ 10,515
$ 2,620
$ 13,135
As per the above calculation ending inventory is 25 units and their cost is $2,620
And Cost of Good Sold is $10,515
LIFO Method
Explanations
Units
Sold
Unsold
Unit Cost
Cost of Good Sold
Cost of Good unsold
A
B
C=A-B
D
E=B*D
F=C*D
Sept. 1
Inventory
12
0
12
$ 100
$ -
$ 1,200
Sept. 12
Purchases
45
32
13
$ 103
$ 3,296
$ 1,339
Sept. 19
Purchases
50
50
0
$ 104
$ 5,200
Sept. 26
Purchases
20
20
0
$ 105
$ 2,100
127
102
25
$ 10,596
$ 2,539
$ 13,135
As per the above calculation ending inventory is 25 units and their cost is $2,539
And Cost of Good Sold is $10,596
Average Cost Method
Explanations
Units
Unit Cost
Cost
A
B
C=A*B
Sept. 1
Inventory
12
$ 100
$ 1,200
Sept. 12
Purchases
45
$ 103
$ 4,635
Sept. 19
Purchases
50
$ 104
$ 5,200
Sept. 26
Purchases
20
$ 105
$ 2,100
127
$ 13,135
Cost per unit=$13,135/127
Cost per unit=$103.43
Cost of Good sold=102*103.43
Cost of Good sold=$10,549.37
Cost of ending Inventory=25*103.43
Cost of ending Inventory=$2,585.63